Canada Drops Private Right of Action for Spam Law

Canada’s Anti-Spam Legislation (CASL) has always been akin to a local commuter train, as it slowly progresses despite frequent stops.  The law, which was passed in December 2010, went through a regulatory maze and did not go into effect until 2014.

CASL Overview

CASL prohibits

  • sending of commercial electronic messages without the recipient’s express consent, including messages to email addresses and social networking accounts, and text messages sent to a cell phone;
  • alteration of transmission data in an electronic message which results in the message being delivered to a different destination without express consent
  • use of false or misleading representations online in the promotion of products or services;
  • collection of personal information through accessing a computer system in violation of federal law ; and
  • collection of electronic addresses by the use of computer programs or the use of such addresses, without permission (address harvesting).

On consent, CASL requires either express consent (i.e., Opt-in) that is not bundled with other terms and conditions and which discloses that consent can be withdrawn; or implied consent where the party has an existing business relationship with the consumer which means a purchase within the last two years or an inquiry within the last six-months.  The law grandfathered in those who had implied consent through existing business relationships prior to CASL’s effective date but only up until July 1, 2017.

CASL Private Right of Action

CASL also delayed a private right of action (PRA) until July 1, 2017.  Under the PRA, which may proceed only if no governmental action, a party could recover actual damages and statutory damages up to C$200 for email violation up to C$1 million per day.

A March 2017 survey by the Direct Marketing Association of Canada, found that

  • despite CASL being in force for three years “there is still a notable lack of understanding about key elements of the law, and an even larger gap when it comes to understanding how it should be implemented to ensure full compliance;” and that
  • “many who think they are compliant still have a way to go.”

Canadian businesses began lobbying to suspend the private right of action and it paid off On June 2, 2017, Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development announced that the private right of action was being suspended indefinitely “in order to promote legal certainty for numerous stakeholders claiming to experience difficulties in interpreting several provisions of the Act while being exposed to litigation risk”.

Canadians deserve to be protected from spam and other electronic threats so that they can have confidence in digital technology. At the same time, businesses, charities, and other non-profit groups should have reasonable ways to communicate electronically with Canadians. We have listened to the concerns of stakeholders and are committed to striking the right balance.

While the private right of action may be suspended, the law still is in effect and the Canadian Radio-television and Telecommunications Commission (CRTC) can still impose potentially severe administrative monetary penalties for CASL contraventions.